A Rhode Island state senator is pushing for a $650 refundable child tax credit per child, aiming to deliver more substantial direct financial relief to families than a smaller proposal from Gov. Dan McKee and to combat child poverty amid rising living costs.

Sen. Lammis J. Vargas, D-Cranston and Providence, introduced legislation (2026-S 2823) that would allow parents and guardians to claim the $650 credit for each child 18 or younger, replacing the current dependent exemption starting with the 2027 tax year. The bill, referred to the Senate Finance Committee in early March, would make the credit fully refundable, meaning families with little or no state income tax liability could still receive the full amount by filing a return.

“A refundable child tax credit is real relief because it puts money directly into the hands of parents who will use it on rent, food and all the things their family needs,” said Sen. Vargasn in a statement. “Unlike the dependent exemption, it reaches the families who are struggling the most.”

Vargas emphasized that low- and middle-income households face heavy burdens from housing, groceries and utilities. The credit, she said, would reduce instances of children going hungry and ease economic stress on parents, calling it an investment in healthier children and a stronger state future.

The current dependent exemption reduces taxable income but offers limited to those in lower tax brackets or with minimal tax liability. In contrast, a refundable credit provides cash back regardless of tax owed.

Similar shifts from exemptions to refundable child tax credits in Massachusetts and Maine have delivered targeted support to families most in need, according to proponents.

McKee included a child tax credit in his FY 2027 budget proposal released earlier this year, converting the dependent exemption into a fully refundable $325 per-child credit. Vargas’ proposal would double the per-child amount that McKee suggested.

The bill has backing from the RIght from the Start Campaign, a legislative effort focused on policies for young children and families, and the Rhode Island Coalition for Children and Families. A child tax credit was among priorities outlined by RIght from the Start in a pre-budget request to state leaders, endorsed by 47 health and welfare organizations across Rhode Island.

The legislation remains in committee as the General Assembly considers tax and budget measures for the upcoming fiscal year. No hearing date has been announced.